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AEG Near L.A. NFL Stadium Entitlement With Farmers Insurance
Published January 10, 2011
|Farmers Insurance Could Pay Around $20M
Annually Under Proposed Deal With AEG
The proposed AEG football stadium in L.A. is "very close to a stadium naming rights deal with Farmers Insurance" in which the company "will pay at least $400 million over 20 years if the deal is consummated," according to SI.com's Peter King (SI.com, 1/10). In L.A., Sam Farmer cited sources as saying that AEG "was originally hoping for a 30-year deal starting at $20 million a year, with annual increases as part of the agreement." In addition, AEG is seeking "multiple 'founding partners' to sponsor elements of the stadium, as is the case with other NFL venues." Farmer noted a naming-rights deal would be a "significant step toward making the proposed stadium/events center a reality, paving the way for the NFL to return to the nation's second-largest market." It would "provide guaranteed income, an important part of any stadium-financing plan." SportsCorp President Marc Ganis said, "I would suggest that this is a smart deal by Farmers. Because if the stadium doesn't happen, they can get a lot of free publicity without putting up any money. If the stadium does happen, they got it at a discount" (L.A. TIMES, 1/8).
TALE OF THE TAPE: In N.Y., Adam Nagourney wrote the "intensity of the fight" between AEG and Majestic Realty, which has proposed a separate NFL stadium in nearby City of Industry, Calif., "reflects an increasing sense that what has long seemed something of a pipe dream might actually happen." Majestic Realty VP John Semcken contends that AEG's plan "would come with traffic jams and exorbitant parking fees and would cost taxpayers millions of dollars." Semcken: "What’s the reaction going to be from a fan if some guy is waving them into a parking lot and says, ‘OK, that’s $50 to park, sir?' To get from downtown to our site -- 25 miles -- is faster than it’s going to take to get the three blocks from the highway exit to the convention center." But AEG President & CEO Tim Leiweke said that downtown L.A. has "shown it could handle the traffic of big events." Leiweke: "They lie. They want to get into a war of words. They want to get into a smear campaign, and we’re not going to do it. Only desperate people say desperate things. The fact is that we will pay 100 percent of whatever the stadium costs." He added, "If ultimately they were so convinced that their site was the right site, they would have had a team there and they would have built it, and they would spend less time throwing rocks at our site." Nagourney noted Semcken recently called Leiweke to apologize for calling the AEG exec a "bad man" in a recent interview (N.Y. TIMES, 1/9).
WILL IT BECOME A REALITY? In L.A., Jon Regardie analyzed the AEG stadium plan and noted it is "hard to tell where things are really." AEG is "expected to choose an architect this month," and Leiweke has said that he "wants the NFL to indicate if it would back a stadium and know which team would move here by March." Regardie: "You can’t be sure whether Emperor Tim has an ace in the hole in terms of a secret handshake agreement with a team owner, or if his confident appearances before Downtown business groups are part of a bluff to win all the chips" (LADOWNTOWNNEWS.com, 1/7).